Roinn Cumarsaide, Gnfomhaithe arson na hAeraide & Comhshaoil Department of Communications, Climate Action & Environment Bay Broadcasting Limited & Classic Rock Broadcasting Limited Phase One Examination Report 27/ 02/ 2018 Table of Contents Table of Contents ..................................................................................................................i 1. Background ........................................................................................... 1 The Purchaser: ....................................................................................................... 1 The Target: ............................................................................................................. 1 Media Sector ....................................................................................................................... 1 The Purchaser: ....................................................................................................... 3 The Target: ............................................................................................................. 3 2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act 4 Significant Interests ............................................................................................................ 4 The Purchaser: ....................................................................................................... 5 The Target: ............................................................................................................. 5 The Views of the Part ies: .................... .. .. .............................................. .. .. ............. 6 Impact : ................................................................................................................... 6 Relevant M edia Assets ........................................................................................................ 7 The Purchaser: ....................................................................................................... 7 The Target: ............................................................................................................. 8 Impact : ................................................................................................................... 8 Ownership and Control ....................................................................................................... 9 Relevant Media Assets: .. .. .. .................................................................................... 9 Regulat ory Oversight: .. .. .. .. .................................................................................... 9 Proposed Changes: ................................................................................................. 9 Impact : ................................................................................................................. 10 Market Share .................................................................................................................... 10 The Purchaser: ..................................................................................................... 11 Media Merger - Bay & Classic Rock; Review - i - The Target: ........................................................................................................... 12 Brand & News Reach: ........................................................................................... 12 The Views of the Part ies: ..................................................................................... 13 Impact: ................................................................................................................. 14 Governance and Editorial Management .. .. ....................................................................... 14 Compliance and Ethics ......................................................................................... 15 Editorial Ethos .. .. .. ................................................................................................ 15 Impact .................................................................................................................. 16 Cont ent ............................................................................................................................. 16 The Purchaser .. .. .. ................................................................................................ 16 The Target ............................................................................................................ 17 Impact .................................................................................................................. 17 Financial ............................................................................................................................ 18 The Purchaser: ..................................................................................................... 18 The Target: ........................................................................................................... 18 Impact : ................................................................................................................. 18 Impact on the Irish Language .. .. .. ...................................................................................... 18 Impact : ................................................................................................................. 19 The scale and reach of RTE and TG4 ................................................................................. 19 Impact : ................................................................................................................. 19 The Views of the CCPC ...................................................................................................... 20 The Views of the BAI ........................................ .. .. .. .. .......................................... .. .. .. .. ....... 20 The Views of the Undertakings Involved ...................................... .. .. ................................ 20 3. Summary of the Application of the Relevant Criteria & s. 280 (2) of the Competition Act ............................................................................................. 21 4. Conclusion ........................................................................................... 25 Media Merger - Bay & Classic Rock; Review - ii - 1. Background 1.1 The proposed media merger involves the acquisit ion of sole control of Classic Rock Broadcasting Limited (the Target) by Bay Broadcasting Limited (the Purchaser) through the purchase of the issued share capital of the Target that is not already owned by the Purchaser.' In this document the Purchaser and the Target are collectively referred to as "the Parties". 1.2 The proposed transaction is to be implemented pursuant to the terms of a Share, Loan Note and Loan Purchase Agreement (S&LA) between the Parties, dated 21 September 2017. 2 This bid is subject to certain express conditions, including, amongst others, regulatory clearance in the State. The Purchaser: 1.3 The Purchaser is a private limited company headquartered in Dublin in the State and is active in the Broadcasting Sector in the State primarily through the operation, through its subsidiaries, of a number of radio stations in the State.3 The Target: 1.4 The Target is a private limited company headquartered in Dublin in the State and is active in the Broadcasting Sector in the State primarily through the operation of a radio station in the State. 4 Media Sector 1.5 Media Mergers, as defined in s. 28A of the Competit ion Act 2002 (as amended) (the Competition Act), refers to those undertakings which "carry on a media business" in the State. A "media business" is defined in the Competit ion Act as follows: (a) 'media business' means the business (whether all or part of an undertaking's business) of- 1 Bay & Classic Rock, Merger Notification Form, p. 3 2 Bay & Classic Rock, Appendix 1, Share, Loan Note and Loan Purchase Agreement 3 Bay & Classic Rock, Merger Notification Form, p. 3 4 Ibid Media Merger - Bay & Classic Rock; Review - 1 - (i) the publication of newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the internet, (ii) transmitting, re-transmitting or relaying a broadcasting service, (iii) providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service, or (iv) making available on an electronic communications network any written, audiovisual or photographic material, consisting substantially of news and comment on current affairs, that is under the editorial control of the undertaking making available such material; 1.6 Furthermore, the current Guidelines on Media Mergers (the Guidelines) provides t he following supplementary definit ion of a "media sector": (a) 'media sector' means one of the following (and 'media sectors' means one or more of the following collectively): (i) Publishing - publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same. (ii) Broadcasting - transmitting, re-transmitting or relaying a broadcast service including radio or television and the production of content for same. (iii) Internet Media making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs.